Ques:- Define various fund based lending methods?
Asked In :-
ISKPRO, Peoplefy Infosolutions, CPCL, Everest Bank, KKR, NBP National Bank of Pakistan, Pramata, Consero Global Solutions, Repos Energy, InCred,
Right Answer:
Fund-based lending methods include:
1. **Term Loans**: Loans provided for a specific period, typically for purchasing assets or financing projects.
2. **Working Capital Loans**: Short-term loans to finance day-to-day operations and manage cash flow.
3. **Overdrafts**: Allowing borrowers to withdraw more than their account balance up to a certain limit.
4. **Cash Credit**: A short-term facility allowing businesses to withdraw funds as needed, up to a pre-approved limit.
5. **Bills Discounting**: Financing against bills of exchange or promissory notes before their maturity date.
6. **Project Financing**: Loans provided for specific projects, secured by the project's cash flow and assets.
Fund-based lending methods include:
1. **Term Loans**: Loans provided for a specific period, typically for purchasing assets or financing projects.
2. **Working Capital Loans**: Short-term loans to finance day-to-day operations and manage cash flow.
3. **Overdrafts**: Allowing borrowers to withdraw more than their account balance up to a certain limit.
4. **Cash Credit**: A short-term facility allowing businesses to withdraw funds as needed, up to a pre-approved limit.
5. **Bills Discounting**: Financing against bills of exchange or promissory notes before their maturity date.
6. **Project Financing**: Loans provided for specific projects, secured by the project's cash flow and assets.